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SPIEF to Show What Russian Far East Has to Offer for Cooperation With Asia

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A lake near the Vachkazhets mountains at Kamchatka - Sputnik International
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Officials and businesspeople at the St. Petersburg International Economic Forum (SPIEF) will discuss the development of the Russian Far East and its cooperation with countries in the Asia-Pacific region on Thursday.

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KHABAROVSK/VLADIVOSTOK (Sputnik) — The panel session, called "Injecting Dynamism in the Russian Far East Economy," will start within the framework of the SPIEF at 11 a.m. local time (08:00 GMT). The panel and would gather a number of front row participants, including Russian Far East Development Minister Alexander Galushka, Deputy Speaker of the lower house of the Russian parliament Irina Yarovaya, Governor of Russia's Far Eastern Khabarovsk Territory Vyacheslav Shport and Governor of China's Heilongjiang province Lu Hao.

A number of businesspeople from such companies as Russia's car-maker SOLLERS, Canada's Kinross Gold Corporation mining company and Russian petrochemical leader Sibur Holding, will also participate in the panel session.

Target Model

Commenting on Russia's policy on the region ahead of the forum, Russian Deputy Minister of Far Eastern Development Aleksander Krutikov said that it was necessary to look at the Far East from the viewpoint of potential investors.

"We have analyzed experience of our neighbors — China, Japan, South Korea, the ASEAN member states, the United States and Canada — and worked out the target model [of development]. To a great extent it has been implemented in the priority development area [PDA]. Maybe it has created incentives for foreign investors to come to the Far East that has always been perceived as a risky territory for investments," the official said.

The deputy minister added that the conditions for doing business and making investments have always fluctuated, and that it was necessary to implement the best practices, such as the decision to reduce energy tariffs in Russia's Far Eastern Federal District.

Primorsky Territory: Window of Opportunity

Alexander Abramov, a professor of the Far Eastern University, considers the region to have many prospects in the sphere of transportation and logistics.

"If it is possible to link the New Silk Road [China's infrastructure project in Eurasia] with Primorye-1 and Primorye-2 international transport corridors and to ensure sufficient amount of cargoes, than huge opportunities are opening. Aside from that, the growth in port logistics is also growing. There are also capacities in the spheres of space launches and aircraft industry," Abramov said.

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The professor added that the region could become an "incubator" of high-technology products and has potential against the backdrop of growing prices of labor power in neighboring countries.

Khabarovsk Territory: Value for Money

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Yuri Chaika, the deputy chairman of the Khabarovsk Territory's government, said that the goods produced in the region could have competitive advantages in the Asia-Pacific Region because of the value for money factor.

In order to outline the potential opportunities the region could create for local business, the official cited TechnoNICOL DV, Energoimpulse as well as RFP Group and their exports to China, Japan and other countries as success stories.

Other Far Eastern projects that could be in demand in the Asia-Pacific region include pulp-and-paper plants construction in the town of Amursk, production of vegetables by JGC Evergreen and modernized airport of Khabarovsk.

Amur: from Trade to Investments

First Deputy Prime Minister of the Amur Region government Marina Dedyushko believes that although local agricultural companies have strong ties with neighboring China, the region was expected to enhance its cooperation in the sphere of investments.  Cooperation in this area is particularly relevant because investments should see an increase after the bridge connecting the Chinese and the Russian banks of the Amur river becomes operational in 2019.

"At the AmurExpoForum in the end of May we have presented a new institution — investment development agency that would provide Chinese and Russian investors with services from the stage of idea to the stage of implementation of the project. We are moving from trade to cooperation in the sphere of investments that should improve following the opening of a bridge," Dedyushko said.

Georgy Fotin, a representative from Russia's Far East Investment and Export Agency, believes that the Amur Region has natural resources worth hundreds of billions of dollars, while its location near China also is another for the region.

Kamchatka Relies on Airports, Seaports

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Dmitry Korostelev, the minister of economic development and trade of the Kamchatka Territory, could increase its attractiveness for foreign investors, who would stand to benefit from the development of sea ports in the region.

"The capabilities of the regional capital's airport are expanded, the modernization of the sea port is ongoing and a project on creation of an alternative cargo hub in Terminal 'Seroglazka.' These measures could increase the potential of Kamchatka Territory in transport and logistics in the region and would have a positive impact on the tourism sphere in the territory," Korostelev said.

Sakhalin: LNG, Bioresources

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Sakhalin region's competitiveness in the Asia-Pacific region is mostly based on its rich natural resources, such as hydrocarbons and aquatic bioresources, Deputy Minister of Economic Development of the region Sergei Karpenko said.

"Sakhalin is the main source of liquefied natural gas [LPG] for the Asia Pacific region, as the only LNG plant in the country is situated here. A third of all country's haul of fish is provided by our region. The regional government is solving an important task to have other trading positions apart from LNG and aquatic bioresources that could be competitive," Karpenko said.

The official added that the region had prospects in the coal industry and in agriculture.

Golden Magadan

Another region in the Russian Far East, Magadan, has competitive advantages connected to the production of gold, Sergey Abramov, the chairman of the local parliament told Sputnik.

"This situation has been reached because of several mechanisms. First of all, the regime of special economic zone is active in our region. It gives a number of preferences and tax exemptions for local business. It also makes a region attractive for investors," Abramov said.

New Challenges

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However, not all the experts have such a positive vision of the Far East's prospects. Yuri Avdeev from the Pacific Geographical Institute of the Far Eastern Branch of the Russian Academy of Sciences considers that there are no spheres in which the Russian Far East could be competitive if to compare with other parts of the Asia-Pacific region and calls for finding new spheres of development.

"No matter what we will do there, our costs would be higher than our neighbors have — energy costs, workforce costs and so on. We should look for other types of activity," Avdeev said.

According to Avdeev, the Far East could exert efforts in three spheres that could be in demand in the Asia Pacific region, namely space industry, marine economy and culture.

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